Northvolt, the Swedish battery manufacturer with the establishment of a 7 billion dollar factory in Quebec, has filed for bankruptcy in Sweden.
In a media release, the company said that the decision to explain bankruptcy can be seen after “exhaustive efforts to investigate all available means to secure a sustainable financial and operational future for the company”.
Northvolt has experienced “a number of compounding challenges in the past few months that undermine its financial position, including rising capital costs, geopolitical instability, subsequent disorders of the supply chain and changes in market demand,” says the press release.
The company says that its North American business is solvent.
Now a judicial trustee will determine the future of companies and assets from Northvolt, including technology and production facilities, the company said.
It was not immediately clear how the bankruptcy of the company would affect the future of massive electric vehicles of $ 7 billion, Northvolt is building in the Montérégie region at the South Shore in Montreal.
In 2023, the government of Quebec promised a financing of 2.9 billion US dollars to the deal with Northvolt. Ottawa has signed up to 1.34 billion US dollars for the construction of the work and other incentives worth $ 3 billion.
Until now, The Quebec government has invested 270 million US dollars in the project and the provincial pension investor, the Caisse de dépôt et placement du québec (CDPQ) also invested 200 million US dollars.
Christine Fréchette, Minister of Economics in Quebec, said in a position on X that the government was disappointed in the situation, but they evaluate their options. She previously said that Northvolt’s bankruptcy applications have no influence on the battery system in Quebec.
“Our wish is that the controller will search for a buyer who will invest to take over all North American activities and restart the Montérégie project,” she wrote.
Despite the bankruptcy of the parent company of Northvolt in Sweden, Northvolt North America, a subsidiary of Swedish society, said in a media release that it remains and intends to fulfill its obligations and to fulfill its financial obligations.
The Swedish government has announced that it would support the company.
